This column appeared as an op-ed piece in this week’s San Antonio Business Journal titled “Most Legal Battles Played by Risk Rules.”
If you are in business for any length of time, eventually you will face a situation where the only solution appears to be the legal process.
A customer who doesn’t pay his bill, a supplier or contractor who doesn’t deliver, or an employee who leaves for a competitor and “steals” accounts all may create situations that cry out for punishment.
Sometimes just being successful seems enough to draw lawsuits, whether justified or not.
I know of one contractor who has been sued twice in recent months for a project that his company hasn’t begun.
Just being listed as a supplier in the contracts was sufficient to have him named as a defendant. His company will eventually be excused, but only after spending thousands of dollars on attorneys and motions.
Being involved in a business lawsuit comes in two flavors — as the plaintiff and as the defendant.
As a defendant, there is nothing like the initial shock and feeling of violation that comes with receiving a summons. The accusations against you may have no basis, but now they are filed with a court of law, and you’ve not had any opportunity to tell your side.
It feels like someone is standing in a crowded room yelling out lies about you, and you are forced to sit silently and let them do it.
As the plaintiff, however, it feels great to load up the claim with every bit of pain and anger the other party has caused you.
Now the other guy will know how unhappy you are. He is finally forced to listen to your issues. He will see that you are serious about making him live up to his obligations.
The most common justification that I hear for a business suit is “They need to be taught a lesson.”
Like Mattie Ross in True Grit, “You will hear from my lawyer!” is an overused threat, but one that gives immediate satisfaction to the utterer.
In business, it can be the opening shot in a process that is lengthy, distracting and expensive.
Most of us have played Parker Brothers’ “Risk- The World Conquest Game.”
In it you build up armies, and take territory by attacking. Dice rolls determine the winner of a “battle,” and the scoring system is heavily weighted to favor the defender. Experienced players know that winning and holding a territory usually requires a numerical advantage of at least three to one before starting a battle.
If you are tempted to launch legal action against another business, you would be wise to remember the strategy in Risk.
Pressing forward in litigation is likely to cost you about three times what it costs the defendant. Once he counters your claim, an unbiased judge or jury may not see your side nearly as clearly as it appears to you. Using the legal process to solve business disagreements costs time and money, and there is always a chance that you will lose.
Regardless of the outcome, you will make a permanent enemy.
Of course, there are times when a situation is so expensive or so egregious that you have no choice but pursue it to the bitter end.
Before you start, ask yourself whether you are willing to play by Risk Rules.
I am a lawyer and an investment advisor. I have never sued anyone or been sued, but I have negotiated many settlements for clients. Those that did not settle and chose to sue have largely been sorry. The emotional cost, the time involved and the many sleepless nights generally make you a loser even if you win.
Most of the time, it is better to be wronged and trust that the good Lord will make it all right in the end.
I have been fortunate that in all my years in business I have never sued or been sued. I have always tried to treat everyone fairly and do business with reputable people and so far it has paid off. Reasonable people can come up with equitable settlements if there are disagreements.